Buyers - it's a new year!
Today’s home buyers are having such a hard time winning out in multiple offer situations that are "oh, so common at this moment." We are sympathetic with our buyers and all buyers!
It is hard to participate in this market as a buyer but be prepared, be patient, and stay STRONG! As tough as it is right now, you will be well served to continue moving forward with your home search rather that shelving it in an attempt to wait out this market. Stave off your frustration. Here’s why:
Low supply, Inflation, and low interest rates are fueling this market:
* Inflation - We can’t do much about it. It is not transitory as some had hoped . It is painfully with us and it will be for awhile. Bonus - real estate is actually a good hedge against inflation.
* Low supply - This low supply environment has existed for years now and has only grown more difficult (see our previous blog post for stats that show a stark perspective). There are no quick fixes here and we will be facing this for years to come; not months.
* Low interest rates are really driving the increased demand. This is a double whammy with our low supply environment. While the Fed would like to raise these rates, they are timid because of our current post-pandemic economy. We are, however, expecting them to raise rates 3 or 4 times this year. And, the mortgage lending rates have already started to climb ahead of these Fed increases. While rates will still be historically low, it is important to note that for every 1% rate increase, your purchasing power is diminished by 10%.
So, by putting off your purchase, the expected increase in interest rates will work against you. Plus, we are expecting prices to continue to rise in 2022. Buy now; not later.
Let’s discuss how these factors impact you specifically!